Jowell: My husband should have told me about 'gift'

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The Culture Secretary Tessa Jowell was cleared by Tony Blair today of breaching the Ministerial Code over her financial affairs - because her husband did not tell her about a massive cash "gift" he had received.

The Cabinet Secretary Sir Gus O'Donnell said in a letter to shadow Commons leader Theresa May that Ms Jowell "fully accepts" that her husband, international lawyer David Mills, should have told her about the money and "if he had, she would of course have reported it to her Permanent Secretary".

Mr Mills agreed with the Inland Revenue that the money he received in September 2000 was eventually treated as earnings, rather than the gift he had at first believed it to be.

But Ms Jowell did not find out about the money until August 2004, said Sir Gus.

Mr Blair immediately backed Ms Jowell, issuing a statement saying: "She is not in breach of her obligations under the ministerial code... I have full confidence in her."

Ms Jowell insisted in a statement: "I have always discharged my responsibilities under the Ministerial Code in good faith."

But the controversy over Ms Jowell's family finances seemed unlikely to fade despite a determined Downing Street drive to insist she is now in the clear.

Sir Gus's eagerly-awaited reply to Mrs May, who had asked him to investigate whether Ms Jowell had broken the code, points out that that is a judgment for Mr Blair.

He simply refers to Ms Jowell's statement which was released by No 10.

Sir Gus says in his letter: "In her statement the Secretary of State has said that she first became aware in August 2004 that her husband had received in September 2000 a sum of money which he thought he had reasonable grounds to believe was a gift.

"By the time she became aware of it, he had already agreed with the Inland Revenue that it should be classified as earnings on which tax should be paid. As the Secretary of State says in her statement, she did not therefore consider it necessary to make any reference about any of this to her Permanent Secretary.

"However, she fully accepts that Mr Mills should have informed her, and if he had, she would of course have reported it to her Permanent Secretary."

The sum involved is thought to be about £350,000.

Ms Jowell said in her statement that she authorised a loan against the couple's London home in September 2000 but was "not aware until recently that the loan had been repaid shortly after it was taken out".

It is claimed the £350,000 "gift" had been used to repay the loan.

Of that cash Ms Jowell says: "I fully accept that my husband should have informed me, and if he had, I would have reported it to my Permanent Secretary."

But she insists: "I have always discharged my responsibilities in good faith."

Mr Blair said of the cash in his statement: "I accept Tessa's assurance that she did not know about it until the issue was resolved with the Inland Revenue.

"In these circumstances, she is not in breach of her obligations under the Ministerial Code."

Ministers have to report any gift - but not their spouse's earnings.

Mr Mills is facing possible prosecution in Italy, amid claims he received money from Prime Minister Silvio Berlusconi for giving helpful court testimony about him - a claim the international lawyer has strenuously denied.

Mr Blair also dismissed claims that the Home Office had mishandled an inquiry about the possible extradition of Mr Mills by dealing with the Italian embassy in London rather than the prosecuting authorities.

Mr Blair repeated the Home Office's statement that they had followed normal procedures.

He added: "Tessa Jowell is an excellent minister who is widely respected. I have full confidence in her."

Sir Gus says in his letter to Mrs May that he has asked all Permanent Secretaries - the most senior civil servant in each Whitehall department - "to discuss regularly with their ministers their obligations to declare any necessary relevant information, as set out under the code".

Ms Jowell goes to some lengths in her statement to explain her family finances.

She says: "Questions have been raised about my personal finances. These are the facts.

"My husband and I jointly own our family home in London. The house in Warwickshire belongs to my husband."

She said the couple's mortgage on their London home had been changed twice and she had also twice agreed to "use our homes as security against a bank loan and signed the relevant papers to do so".

She said a loan against Mr Mills's Warwickshire home required her approval because she was regarded as a resident there.

Ms Jowell says her husband will "vigorously defend" legal proceedings in Italy.

There were fresh claims this morning in the Daily Mail, said to be based on documents forming part of a 15,000-page prosecution dossier in Milan, that Mr Mills tried to use his wife's position and their friendship with Mr Blair in his business life.

He is reported to have made the points to authorities in Dubai after they rejected his application to practise in the Middle East.

Ms Jowell and her husband have consistently denied that he received a bribe for testifying about Mr Berlusconi and both Mr Mills and Mr Berlusconi's lawyer have denied the Italian premier gave him the money.